PRINCIPAL COMMISSIONER OF IN vs. M/S.FL SMIDTH PRIVATE LIMITED

T.C.A.No.277 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.04.2021 CORAM THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA T.C.A.No.277 of 2021 Principal Commissioner of Income Tax 2, No.121, Mahatma Gandhi Road, Chennai – 600 034. ... Appellant Vs. M/s.FL Smidth Private Limited, 34, Egatoor, Kelambakkam, Rajiv Gandhi Salai, Chennai – 600 103. ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, “D” Bench, dated 05.09.2017 in I.TA.No.2118/Mds/2011, Assessment Year 2007-08. For Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For Respondent : Mr.S.P.Chidambaram Page 1/5 http://www.judis.nic.in T.C.A.No.277 of 2021 JUDGMENT (Judgment was delivered by M.DURAISWAMY, J.) We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel for the appellant/Revenue and Mr.S.P.Chidambaram, learned counsel for the respondent/assessee. 2.The appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 05.09.2017 made in I.TA.No.2118/Mds/2011 on the file of the Income Tax Appellate Tribunal, Chennai, “D” Bench (for brevity, the Tribunal) for the Assessment Year 2007-08. 3.The appellant/Revenue has raised the following substantial questions of law in the above appeal : “1.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in deleting the disallowances made under Section 40(a)(ia) of the Act on the commission payment to the non-resident agent, Page 2/5 http://www.judis.nic.in T.C.A.No.277 of 2021 relying on the decision of Hon'ble Madras High Court in the case of CIT vs. Faizan Shoes Pvt. Ltd. TCA No.789 of 2013 dated 22.07.2014, when the facts of the case are distinguishable? 2.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in deleting the disallowances made under Section 40(a)(ia) of the Act on the payment towards import of engineering drawings from its associated enterprises at Denmark, as per provision of explanation 2 to Section 9(1)(vii) of the IT Act, relying on the decision of Hon'ble Madras High Court in the case of CIT vs. Faizan Shoes Pvt. Ltd. TCA No.789 of 2013 dated 22.07.2014, when the facts of the case are distinguishable?” 4.The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the Low Tax Effect in terms of Circular No.17/2019 dated 08.08.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been Page 3/5 http://www.judis.nic.in T.C.A.No.277 of 2021 increased to Rs.1 crore. It is further submitted that the tax effect in this case is less than the threshold limit. 5.In the light of the said submissions, the above Tax Case Appeal is dismissed as withdrawn on account of the Low Tax Effect. The substantial questions of law framed are left open. In the event the tax effect in this case is above the threshold limit fixed in the said Circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits. No costs. [M.D., J.] [R.H., J.] 28.04.2021

Index : Yes/No Internet : Yes

mkn To 1.The Income Tax Appellate Tribunal, Chennai, “D” Bench 2.The Principal Commissioner of Income Tax 2, No.121, Mahatma Gandhi Road, Chennai – 600 034. Page 4/5 http://www.judis.nic.in T.C.A.No.277 of 2021 M.DURAISWAMY, J. and R. HEMALATHA, J. mkn T.C.A.No.277 of 2021 28.04.2021 Page 5/5 http://www.judis.nic.in